# Reversal Candlestick Structure

Reversal Candlestick Structure is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®.

Detects sixteen classic candlestick patterns and filters them through a stochastic-based reversal algorithm, so patterns are highlighted only when trend conditions favor a turn. Candle coloring cues developing reversals, and a dashboard reports the share of patterns that coincided with them. A pattern scanner with context built in.

- Indicator in the LuxAlgo Library, by LuxAlgo, published May 21, 2024.
- Access: free.
- Concepts: [Reversal](https://www.luxalgo.com/library/concept/reversal/) (primary), [Bullish/bearish Engulfing](https://www.luxalgo.com/library/concept/bullish-bearish-engulfing/), [Hammer](https://www.luxalgo.com/library/concept/hammer/), [Shooting Star](https://www.luxalgo.com/library/concept/shooting-star/)
- Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwn58ia007dvhsgvftppgg8
- Page: https://www.luxalgo.com/library/indicator/reversal-candlestick-structure/

**Reversal Candlestick Structure** detects sixteen classic candlestick patterns and filters them through a stochastic-based algorithm, highlighting patterns when conditions actually favor a [trend reversal](https://www.luxalgo.com/library/concept/reversal/) rather than everywhere they appear. A dashboard reports what percentage of detected patterns coincided with reversals, turning pattern-watching into something measurable.

## How to Trade the Reversal Candlestick Structure?

- **Bullish pattern labels**: hammer, inverted hammer, bullish [engulfing](https://www.luxalgo.com/library/concept/bullish-bearish-engulfing/), morning star, three white soldiers, bullish harami, tweezer bottom, and the rising three formation.
- **Bearish pattern labels**: hanging man, shooting star, bearish engulfing, evening star, three black crows, bearish harami, tweezer top, and the falling three formation.
- **Candle coloring**: colored candles (with an optional gradient) give visual cues of potential reversals as they develop.
- **Reversal % dashboard**: the share of each pattern's detections flagged as potential reversals; hovering the column reveals the total number detected.

The filtering layer sets it apart from a plain pattern scanner: stochastic-oscillator-based detection highlights patterns only when the trend context supports a turn.

## Reversal Candlestick Structure Settings

- **Patterns**: individual toggles for each of the sixteen supported candlestick patterns.
- **Trend Length**: sensitivity to longer trends. Increasing it can reveal more patterns, at the risk of information overload.
- **Threshold**: ranges 0–100; higher values prevent early trend-extremity detection.
- **Warmup Length**: the establishment period a trend needs before reversals are considered.
- **Style & dashboard**: candle coloring, gradient mode, label size, plus dashboard visibility, location, and size.

## Frequently Asked Questions

### Are all sixteen patterns reversal patterns?

Most are, but the set also includes the rising three and falling three (continuation structures), so both turns and trend resumption are covered. Per-pattern toggles let you run a strict reversal-only subset if preferred.

### How do I cut down false signals?

Push the Threshold toward the upper end of its range so trend extremes are harder to reach, and lengthen the Warmup Length so abrupt moves aren't misclassified as reversals. Both trade signal frequency for reliability.

### How can I use it, and what complements it?

It is free on the LuxAlgo Library and can be explored in Quant, our coding agent, right from this page. For location context, [Reversal Probability Rows](https://www.luxalgo.com/library/indicator/reversal-probability-rows/) quantifies where reversals historically clustered. A pattern landing inside a high-probability row carries extra confluence. You can also copy the source code from this page and run it anywhere Pine Script® runs.

## Related indicators

- [Reversal Signals](https://www.luxalgo.com/library/indicator/reversal-signals/) (Reversal): markdown at https://www.luxalgo.com/library/indicator/reversal-signals.md
- [Reversal Probability Rows](https://www.luxalgo.com/library/indicator/reversal-probability-rows/) (Reversal): markdown at https://www.luxalgo.com/library/indicator/reversal-probability-rows.md
- [Reversal Probability Zone & Levels](https://www.luxalgo.com/library/indicator/reversal-probability-zone-levels/) (Reversal): markdown at https://www.luxalgo.com/library/indicator/reversal-probability-zone-levels.md
- [HTF Reversal Divergences](https://www.luxalgo.com/library/indicator/htf-reversal-divergences/) (Reversal): markdown at https://www.luxalgo.com/library/indicator/htf-reversal-divergences.md
- [Bart Pattern](https://www.luxalgo.com/library/indicator/bart-pattern/) (Reversal): markdown at https://www.luxalgo.com/library/indicator/bart-pattern.md
- [Candlestick Channels](https://www.luxalgo.com/library/indicator/candlestick-channels/) (Bullish/bearish Engulfing): markdown at https://www.luxalgo.com/library/indicator/candlestick-channels.md
- [Candlestick Structure](https://www.luxalgo.com/library/indicator/candlestick-structure/) (Bullish/bearish Engulfing): markdown at https://www.luxalgo.com/library/indicator/candlestick-structure.md
- [Swing Highs/Lows & Candle Patterns](https://www.luxalgo.com/library/indicator/swing-highs-lows-candle-patterns/) (Hammer): markdown at https://www.luxalgo.com/library/indicator/swing-highs-lows-candle-patterns.md

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Source: https://www.luxalgo.com/library/indicator/reversal-candlestick-structure/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/